Culture

A Third Power

June 25th, 2012 // 9:33 pm @ Oliver DeMille

Michael Strong wrote, in his excellent book Be the Solution: How Entrepreneurs and Conscious Capitalists Can Solve All the World’s Problems:

“A short history of twentieth-century economic and political thought might be summarized as:

“Market Failure! Markets don’t work as well as the classical economists thought and therefore we must control them (1900-1960).

“Government Failure! Governments don’t work as well as democratic theorists thought, and therefore we can’t depend on them to do the right thing either (1960-2000).”

Markets are excellent for what they are for! Free markets create more wealth and distribute it more widely than any other economic model.

Under free markets we always witness a large middle class.

But the market doesn’t solve all problems in society.

Nor does government.

Neither markets nor governments solve everything.

Markets create more affluence and involve more people in prosperity than any other system, and governments are the most effective entity in protecting inalienable rights and maintaining laws that allow markets to flourish.

But there are a number of things governments should not do and markets will not naturally do, and these tend to be precisely the major challenges our society faces (and seldom solves).

If we are to effectively address society’s main ills (beyond a quality standard of living for most people and the protection of our rights and freedoms), people need to voluntarily take on the world’s ills and find ways to address them.

Charity, philanthropy, volunteer service, service project and social entrepreneurship (the creation of companies or projects with the specific goal of addressing societal problems) is vital.

Government is great for what it is for, but it becomes dangerous to all when it goes beyond its proper role.

Markets are fabulous for creating affluence and helping spread it to a large middle class, but they are not focused on fixing the various societal ills.

It is up to people to improve our world beyond the natural roles of government and markets.

The discussion nearly always centers around how government should do everything versus how government should do less and leave more to markets.

But those arguing for markets too seldom go out and really implement needed solutions in our communities and nation.

It’s time to get past the old Cold War argument.

Of course government should be limited, of course markets can do many things better than government, and of course markets depend on good government policy for safety and the rule of law.

But there is another piece to fixing the world: the non-governmental, non-market driven action of individuals who see a need and set out to make a difference.

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Oliver DeMille is the co-founder of the Center for Social Leadership, and a co-creator of Thomas Jefferson Education.

He is the co-author of New York Times, Wall Street Journal and USA Today bestseller LeaderShift, and author of A Thomas Jefferson Education: Teaching a Generation of Leaders for the 21st Century, and The Coming Aristocracy: Education & the Future of Freedom.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.

Category : Blog &Culture &Current Events &Economics &Featured &Government &Leadership &Mission &Statesmanship

The One Thing That Really Annoys Me

June 13th, 2012 // 2:54 pm @ Oliver DeMille

I think I’ve heard every side of the education debate over the past two decades, including different theories of education, the pros and cons of each new educational fad and curriculum, and the opinions of those who support the typical education system versus the many differing views from those who don’t.

I find most of this discussion healthy and intriguing—after all, all the passion shows that many people care deeply about the education of our children.

But there is one thing that really annoys me.

I read it again just this week.

An otherwise stellar writer and usually wise thought-leader said it, and though I’ve heard it before I still cringe whenever it comes up.

It’s the one thing you can’t really say about fixing education, because it is just plain wrong.

This frustrating argument goes something like this: American education needs serious reforming, there are a lot of good ideas on how to do this, but if the changes depend on parents it just isn’t going to work—the experts, in public and/or private schools, are the only ones who can lead this.

My response? This idea is totally false.

Moreover, it’s downright dangerous to a free nation. Those who promote this idea either don’t know what they are talking about or have some dark agenda.

The Bible says those who hurt our little ones should have a millstone put around their neck and be thrown in the ocean.

Okay, that’s not exactly what the Bible says. And clearly I’m putting too much angst into this. Many of the writers are probably good, well-intentioned people.

I need to calm down. Breathe. Live in the now. Zen.

But, as you can probably tell, this topic really gets my ire up.

I think one of the reasons it is so frustrating is that at first glance it sounds quite reasonable. Many people hear this and nod their heads reflexively.

That’s how much we’ve come to trust experts in modern times. “Give me an expert. Any expert…”

The truth is something quite different.

If parents don’t buy in, no educational reform is going to work, no matter how many experts, think tanks, studies, politicians and Presidents support the change.

More to the point, significant and lasting change will only occur when parents truly lead out.

Parents are the indispensable individuals in reforming education.

Certainly there are exceptions to this, examples of students with little parental support who succeed anyway, but the overall direction of education in society is led by a nation’s parents.

It’s time we admit this and approach education reform accordingly.

The future of our society doesn’t depend on Harvard, it depends on our dinner tables.

Current proposals to fix America’s education system are divided into roughly two categories: (1) those that recommend top-down reforms by experts, and (2) those that suggest changes by parents and students.

Both can help, of course.

With that said, there are very few of the second type, and these are given very little credence by the educational elite.

For example, Montessori, Charlotte Mason, homeschooling and other such bottom-up approaches are seen by the education bureaucracy as perhaps useful for a few children and families but not legitimate systems for widespread improvement of education.

This is the old mistake of aristocracies and meritocracies, where innovators become leaders and then their posterity, from their perch at the top of society, routinely discounts the validity of rising innovations.

An executive at 3M once told me that the company was founded by creative and innovative entrepreneurs, but that today none of them could even get an interview at 3M—their resumes just wouldn’t be enough to get through the door with the new-fangled HR guidelines.

Actually, some of the expert proposals for educational reform are quite good, even innovative.

But the attempt to apply them from the top-down, with expert educational theorists training school managers, is doomed from the start because parents are almost entirely left out of the formula.

The future of our educational system—and, by extension, nation—depends on the values of innovation, initiative, creativity, individualism and entrepreneurialism.

These are hardly the natural lessons of our school environments or curricula, nor are they the example set by most of our current cadre of teachers.

Indeed, with all due respect, emulating many of our modern educators or applying the universal lessons of our typical school environments and textbooks is as close to the opposite of innovation, creativity, initiative, individualism and entrepreneurialism as possible.

This irony is central to our education problem.

The system is widely institutionalized, bureaucratic, anti-innovation and conveyor-belt oriented.

Only innovators can really teach innovation, but innovation is by nature risky and therefore seldom a point of career advancement in our teaching system.

The opposite is true, of course, in the growing non-traditional education sector, which is the source of nearly all proposals of the second type.

Many parents face significant criticism when they choose alternative educational paths for their children, but it is exactly such courageous initiative which trains students to be innovative and creative.

On the one hand, prestige and credibility in education are headed in the direction of more of the same, even while the experts give lip-service to innovation but refuse to actually innovate in major ways.

On the other hand, one generation’s innovators are the next generation’s leaders.

Such non-traditional education may appear strange, or even arrogant and indulgent, today, but it is better to be risky than stagnant.

One cliché remains demonstrably true about history: Change happens, and those who try to achieve progress by refusing to innovate are always disappointed.

Homeschooling is profound precisely because it is led by parents. Indeed, the people who make this choice are, by definition, innovative, creative and courageous—or will become so if they stick to it. The same holds true of many other non-traditional educational choices.

The truth is, many professional educators already know this.

For example, I grew up in the home of two teachers.

My father taught fourth grade at the local public elementary school, and later taught third grade and served as a vice-principal before he retired.

His entire career was spent in public schools.

My mother’s career was similar. She taught high-school English and spent a few years teaching English at the local community college before returning to teach high school.

Both of them repeated the following mantra so many times that I grew up assuming everyone knew it: Most of the students who excel in public school are those whose parents are deeply involved with their education.

Homeschooling, Montessori, unschooling, and other non-traditional educational models may not be for everyone in our complex modern nations, but one fact remains a verifiable law of educational reform: Any reform that doesn’t engage and involve the nation’s parents will fail.

Write it in stone.

Parents are the indispensable individuals in society’s educational success.

If you want to influence the future of education, get the parents to lead it.

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Oliver DeMille is the co-founder of the Center for Social Leadership, and a co-creator of Thomas Jefferson Education.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.

Category : Blog &Culture &Education &Entrepreneurship &Family &Featured &Leadership &Liberty

The Battle of the 21st Century

June 7th, 2012 // 6:51 pm @ Oliver DeMille

Once, science and religion and art were the same thing—the search for, and attempt to live, truth.

Then came the rise of dominant government and its attempts to control all.

In the Western world, religion and science were seen as the tools of power.

Sides were taken, and conflicts ensued. Left out of the battle, art developed in the shadows.

In the Orient, a different reality evolved.

Art and religion were considered the great centers of power, and so the lines were drawn and battles came.

Science, once at the forefront of Eastern culture, took a back seat. It grew, but behind the scenes.

By the early 21^st Century, at least from the perspective of government power, science had become technology and art had become symbol.

Today the globe is increasingly divided between East and West.

A world is growing around China, encompassing the Orient and also much of the Middle East and Africa.

Another world is centered around the United States and includes most of Europe and the two American continents.

Russia and India have yet to take sides, and Japan is caught between its natural philosophical and geographical sides.

These two worlds have been based on the battle between religion and science in the West and the clash between art and religion in the East.

Ironically, the growing conflict between the two worlds coincides with the rise of each culture’s historical shadows—put succinctly, if the battle comes down to technology the East will win and if it comes down to symbolism the West will be victorious.

Tocqueville predicted in the 1830s that the world was destined to be divided by the followers of Russia and the allies of the United States.

He said that if the battle came down to military conflict Russia would win but if it came down to economics the United States would prevail.

Today, we can see the rise of China and the U.S. in similar terms.

But the idea that China will triumph if the battle is technological while the U.S. will succeed in a symbolic challenge seems counter-intuitive. After all, China is struggling to catch up with the U.S. in things technological and China has millennia of experience mastering symbol.

Still, it isn’t old sources of power that win new conflicts. Innovative power takes the day, and the battle of the 21^st Century is lining up to be innovative technology versus innovative symbolism.

Ultimately, it all comes down to leadership. Vision. Creativity. Initiative. Ingenuity. Tenacity. Resiliency. Impact. Hope. Inspiration.

China and its associates will likely fight for its global interests using overwhelming centralized state technological might.

America and allies will push for a democratic world utilizing the massive power of the greatest ideas—chief among them freedom.

Both sides will use both technology and symbol, just like both Russia and the U.S. emphasized both military and economic strength.

But ultimately symbol must overcome centralized might.

The future of world freedom and prosperity depend on it.

Hopefully, the history of this century will not unfold this way, but currently the trends are heading in this direction.

The battle has already begun, and China is aggressively pursuing this course while the U.S. stagnating in a rut of decline.

The sooner America gets its act together, the better.

(An excellent book on how to add symbolic thinking to our analytical world is A Whole New Mind by Daniel Pink.)

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Oliver DeMille is the co-founder of the Center for Social Leadership, and a co-creator of Thomas Jefferson Education.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.

Category : Arts &Blog &Culture &Current Events &Featured

The New Grand Strategy for 2012

February 20th, 2012 // 2:50 pm @ Oliver DeMille

1. Two Speeches

Several years ago I spoke at a seminar on international affairs and I predicted that in the next few years the United States would adopt a new Grand Strategy. I outlined America’s historical Grand Strategies, from Constitutionalism (1789-1820) and Manifest Destiny (1820-1900) to Nationalism (1900-1945) and later Internationalism (1945-2001).

I pointed out that our Grand Strategy is the way we define our major national goals for the decades ahead, and that after 9/11 we were on track for a new Grand Strategy. We discussed some possible Grand Strategies that could come, and we brainstormed things we hoped to see in the Grand Strategy of the 21^st Century.

The same year, in another speech on a different occasion, I showed how many of the predictions found in one publication, Foreign Affairs, keep ending up as official U.S. policy. I cited numerous examples from articles in Foreign Affairs and showed how within five years of publication their recommendations were adopted. I marveled that one publication could have such an effective track record, and recommended that everyone in attendance subscribe to and read this magazine.

Of course, as I said in the speech, not all the authors in Foreign Affairs agree on every detail, and in fact they engage in a great deal of debate. But, again, is it amazing how often policies recommended in Foreign Affairs end up being implemented in Washington.

Then, just this year, the messages of these speeches came together in an interesting way. In the January/February 2012 issue of Foreign Affairs, a new article outlines a new Grand Strategy for the United States. Although I don’t agree with many of the details in this latest Grand Strategy, the track record of Foreign Affairs promises that this will, in fact, be the Grand Strategy of the United States in the decades ahead.

I believe that this will be the major 21^st Century challenge for the future of American freedom.

2. Grand Strategy Drives the Nation

The power of a Grand Strategy can hardly be overstated. When a nation adopts a Grand Strategy, it dominates national policy and influences all national choices over time. Few, if any, policies go against or are even allowed to compete with the accepted Grand Strategy.

And while not everyone knows what a Grand Strategy is, the intelligentsia of both parties tend to follow the Grand Strategy with the energy and passion of religious doctrine. They may disagree on many things, but they both adhere to the Grand Strategy.

So what is the new Grand Strategy of the United States? The answers are outlined in an article by Zbigniew Brzezinski: “A New U.S. Grand Strategy: Balancing the East, Upgrading the West”. Students of American policy will remember Brzezinski as the U.S. National Security Advisor from 1977 to 1981 and as a long-time writer on U.S. international strategy.

3. Our New Grand Strategy

Things have changed drastically over the past decade, Brzezinski assures us, and by 2012 a new Grand Strategy is overdue. The outlines of this new plan include the following:

The “central focus” for the United States in the years ahead is threefold: (1) revitalize the U.S., (2) help the West expand, and (3) create a balance in the East that will allow China to successfully rise without becoming an enemy.

The expansion of the West will create a democratic free zone from North America and Western Europe to a number of other nations, including Eastern Europe, Russian, Turkey, Japan and South Korea.

In the East, U.S. power and influence will attempt to create a cooperative relationship between China and Japan and keep Chinese-Indian relations from turning to violent conflict.

To accomplish all this, the U.S. must become a better “promoter and guarantor” of unity and simultaneously a “balancer and conciliator between the major powers of the East.”

To have any credibility in these roles, the U.S. must effectively “renovate itself at home.” This requires, says Brzezinski, four things: (1) better innovation, (2) improved education, (3) a balance of American power and diplomacy, and (4) a better focus on quality political leadership in Washington.

One of the most important changes ahead must be an effective improvement of relations between the United States and the European Union. The two sides of the Atlantic have been drifting apart since the fall of the Berlin Wall, but this trend must be reversed. Otherwise, growing conflicts between the United States, the European Union, and Russia could weaken the West and cause it to splinter and become increasingly pessimistic. This would also promote a more contentious China.

The U.S. should decrease military power in Asia and emphasize increased cooperation with China.

Taiwan will at some point have to reconcile in some way with China.

Unfortunately, there are a number of problems with this new strategy. If this is the outline of the years ahead, the U.S. will definitely face an era of deepening international confusion and tension.

Despite this reality, the historical track record of Foreign Affairs suggests that this is the Grand Strategy we will follow. If this occurs, voters will elect one party and then the other, and remain frustrated when the on-going Grand Strategy of our international affairs keeps our economic and other national policies going in the same direction.

Adoption of this Grand Strategy is a path of inevitable decline, regardless of what the experts say. Election after election, we’ll seek real change but see whoever is in the White House continually push our nation in the same negative direction.

4. Significant Flaws

Specifically, this new Grand Strategy has at least the following major defects:

An abandonment of support for an independent Taiwan, even through a subtle shift of attitude as suggested, amounts to a significant reversal of America’s historical loyalty to our allies. Such a change will undermine our credibility with other nations and further erode Washington’s credibility with American voters.
The attempt to bridge differences between the United States and European nations in this Grand Strategy takes the tone of the U.S. becoming more like these nations—rather than influencing these countries to adopt more freedom-based values historically espoused by the U.S.
Adoption of this new Grand Strategy may amount to a de facto appeasement of China. If China is, in fact, following a savvy strategy of replacing America as the world’s dominant super power and transporting its fundamental values around the globe, then this would be nothing less than a disastrous policy. And even if China is a good-faith seeker of more global participation, cooperation and open trade, it certainly wants to spread its central values and ideals—nearly all of which are antithetical to freedom.
The emphasis on increased business innovation and improved education in this strategy seem to rely on increased government spending and intervention in our economy rather than policies that incentive increased free enterprise, innovation, hiring and entrepreneurialism. This is yet another attempt to move away from traditional American values and adopt instead the government-run mercantilist practices of European and Asian economies.
The focus in this policy is a shift from internationalism (a policy of interactions between sovereign nations with America as a world leader) to globalism (where the United States submits its actions to the decisions of international organizations).
Note that while we have changed the Constitution through Amendments less than thirty times in over two hundred years, it has been changed in literally thousands of ways through treaty (and these changes are seldom noticed by most Americans). While treaties were used to skirt the Constitution many times under the Internationalist Grand Strategy since 1945, this new Globalist Grand Strategy will make this the major focus of its policies, totally ending Constitutional rule in the United States. This is not an exaggeration but rather a technical reality.

In short, this new Grand Strategy is a de facto end to the traditional American Constitutional system. If it is fully adopted, and all indications are that this is what is occurring, our free system is in immediate jeopardy.

I am an optimist, and I believe that the best America and the world have to offer is still ahead. Yet in a nation of laws, in a society where the fine print of contracts, statutes, judicial dicta, executive agency policies and treaties are our higher law, this new Grand Strategy promises to rewrite our entire system in a few agencies dominated by unelected international experts and almost entirely out of the public’s eye. This is not a republic or democracy, but a true technocracy.

Again, the result will be elections where we vote our passions but where little changes no matter which candidates win each campaign.

In such a world, the fine print in our treaties will run the show, though few will realize what is happening or understand why our freedoms and economy are constantly in decline no matter which party we put in charge of Washington.

It is hard to overstate just how significant this current change is in our world. Freedom is literally at stake.

5. Solutions

We don’t need better leaders or public officials as near as much as we need better citizens. Historically, the American founders knew that freedom could only last if regular citizens had the same level of education as our Governors, Senators, Judges, experts and Presidents.

When any nation is divided between, on one hand, a class of political experts who read and understand the fine print of what is really happening and, on the other hand, the rest of the people who don’t read or get involved in such intricate details, freedom is inevitably lost.

There are no exceptions to this in history.

We will either become such citizens, or our freedoms will be lost.

If this is too much to ask of modern citizens, then freedom is too much for us to handle. Just consider what Samuel Williams, a Harvard professor in the American founding era, said about the average education of American children in 1794:

“All the children are trained up to this kind of knowledge: they are accustomed from their earliest years to read the Holy Scriptures, the periodical publications, newspapers, and political pamphlets; to form some general acquaintance with the laws of their country, the proceedings of the courts of justice, of the general assembly of the state, and of the Congress, etc.

“Such a kind of education is common and universal in every part of the state: and nothing would be more dishonorable to the parents, or to the children, than to be without it.”

Such people were deep readers. And the freedoms they fought for and maintained showed it. The only way to get back such freedoms is to once again become such citizens. What is needed, regardless of what the experts in Washington do, is a widespread grassroots grand strategy of becoming the kind of citizens and voters who are truly capable of maintaining freedom.

(For more on how to become this kind of citizen and reader, see the book A Thomas Jefferson Education by Oliver DeMille.)

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Oliver DeMille is the co-founder of the Center for Social Leadership, and a co-creator of Thomas Jefferson Education.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.

Category : Blog &Culture &Current Events &Entrepreneurship &Foreign Affairs &Generations &Government &Leadership &Liberty &Prosperity &Statesmanship

American Decline

November 3rd, 2011 // 3:00 pm @ Oliver DeMille

Is it Avoidable or Inevitable?

“We’re not going to bail our way out of this crisis, we’re not going to stimulate our way out of this crisis, we are only going to educate, ultimately, and imagine and invent our way out of this crisis.”
—Thomas L. Friedman, Meet the Press

“By 2020, the U.S. will be spending $1 trillion a year just to pay the interest on the national debt.
Sometime between now and then the catastrophe will come. It will come with amazing swiftness.”
—David Brooks, The New York Times

On the same week[i] the White House released its prediction that unemployment will get even worse every year in 2012, 2013 and 2014, Friedman and Mandlebaum’s book entitled That Used to Be Us focused the national dialogue on the deepening decline of the United States.

Fortunately, Freidman and Mandlebaum also outline a plan for how America can come back soon.

Harry S. Dent’s newest book, The Great Crash Ahead, further elaborates on this topic.

Friedman and Mandelbaum’s argument goes something like this: the United States is in serious trouble because of four great trends that are bringing massive change.

Our decline didn’t start with the housing crisis in 2008, but back in the late 1980s at the end of the Cold War.

Four Trends

First, according to Freidman,[ii]

“We made the worst mistake a country or species can make, at the end of the Cold War, when we misread our environment. We interpreted the end of the Cold War as victory…not understanding that it was actually the onset of one of the biggest challenges we’ve ever faced as a country.

“We had…unleashed two billion people just like us. But the nineties turned out to be quite a party thanks to the peace dividend, thanks to the massive productivity boost of the Internet and thanks, most importantly in many ways, to the collapse in oil prices, which was like a huge tax cut.”

Second,

“9/11 set us on a really bad course. We spent the last decade—in many ways necessarily, in many ways excessively—chasing the losers from globalization rather than the winners.

“And we made up for a lot of the fall behind…by basically injecting ourselves with steroids. Just as baseball players did it to hit home runs, we injected ourselves with credit steroids, creating a huge housing boom and construction boom to create jobs.”

Third,

“The number of people who can compete, connect and collaborate exploded in the last decade. You know,”

Freidman continued,

“I wrote a book in 2004 called The World is Flat, which was about this connecting of the world. We’ve gone from connected to hyper-connected…. When we sat down to write this book, I actually went back to The World is Flat, I looked in the index, and I realized that Facebook wasn’t in it.

“When I said ‘the world is flat,’ Facebook didn’t exist, or for most people it didn’t exist, Twitter was a sound, the Cloud was in the sky, 4G was a parking place, Linked In was a prison, Applications were what you sent to college, and for most people Skype was a typo…

“That all happened in just the last seven years. And what it’s done is taken the world from connected to hyper-connected. And that’s been a huge opportunity, and a huge challenge.”

Fourth, we’ve witnessed a huge generational shift.

“We went from the Greatest Generation, whose philosophy was basically to save and invest, and we are still living off their saving and investing, to basically the Baby Boomer generation, whose philosophy turned out to be ‘borrow and spend.’

“And we’ve really shifted from a generation born in the Depression, World War II and the Cold War—these were serious people, they wouldn’t think of shutting down the government for a minute—to a generation…that is much less serious.

“We’ve gone from basically the values of the Greatest Generation…to a Baby Boomer generation whose values are situational….

“You put them all together, and I think you really account for a lot of the hole we’re in right now…”[iii]

The book goes in more depth on each of these themes. More importantly, the book outlines some well-considered solutions.

For example, major employers, according to Friedman, are “all looking for the same kind of employee now: Someone who can do critical reasoning and thinking…who can adapt, invent, and reinvent the job, because in this hyper-connected world change is happening so fast. You know, there are companies now in Silicon Valley that do quarterly employer reviews…because their product cycle is changing so fast. You can’t wait until the end of the year to find out you have a bad team manager.”[iv]

Clearly, Freidman argues, education has got to change—it’s been too rote, and now it needs to prepare thinkers, leaders and innovators.

This is a hard job for an industry made up of mostly non-entrepreneurial, deeply security-minded types.

“What we argue in the book…going forward there really are just going to be two kinds of countries in the world: HIEs and LIEs: High-Imagination-Enabling countries and Low-Imagination-Enabling countries.

“Forget Developed and Developing….

“We’re not going to bail our way out of this crisis, we’re not going to stimulate our way out of this crisis, we are only going to educate, ultimately, and imagine and invent our way out of this crisis.”[v]

Friedman and Mandelbaum’s analysis is much needed in our current nation.

We train our youth not to take risks, and to get the “right” answer rather than the wise answer.

These two big problems are a serious challenge.

Without wise risk, prosperity and leadership are impossible.

Friedman’s 5 Pillars

The authors of That Used To Be Us note that the United States won at every major historical turn because we followed what Friedman called “the 5 Pillars”:

1-“Educate our people up to and beyond whatever the level of technology is…

2-“Immigration. Attract the world’s most talented and energetic people…

3-“Have the world’s best infrastructure…

4-“Have the right rules for incenting, capital formation and risk taking…

5-“Government-funded research.”[vi]

Note that these five form a powerful private society where the government maintains the right rules and incentivizes free enterprise.

All five have significantly decreased since the year 2000, really since 1989, and today the Right is strongly against 2 and 5 while the Left is adamantly against 4.

Both are caught in the trap of trying to accomplish 1 and 3 using the same old methods that haven’t worked for over two decades.

No wonder we’re in decline.

We’ve stopped doing the most important things that brought America’s original and lasting successes.

The Left pushes too strongly for government-only solutions while the Right rejects any government role.

As journalist Paul Gigot noted,

“The irony is, of the past thirty, forty years, that the prestige of government has collapsed most rapidly when government has tried to do…far more than it is capable of doing.

“Government prestige increased under Ronald Reagan, the great supposed enemy of government, because he showed when you focused on a couple of things and did it well, and got the economy growing, that people said, ‘You know what, they’re competent there. It’s working.’”[vii]

We need government.

We need it to protect equal rights for everyone and maintain a system where all are treated equally before the law.

This encourages free enterprise, economic growth and improved prosperity.

Societies without such governments have little freedom.

Of course, the danger is that good government can become overbearing and put a damper on economic growth and success.

Today we have government that has clearly over-reached in a number of ways, and a backlash from the Right that wants little or no government.

We need to adopt a middle approach, good government that is, in a phrase used in the American founding, “strong and limited.”

Actually, in The Federalist Papers the term was frequently “vigorous and limited.”

We want a strong government, and at the same time we want a limited government. That is what good constitutional government is all about.

Many from the Right may consider the Friedman/Mandlebaum book a push for too much government just as many from the Left will wonder that it doesn’t push for more government solutions.

American citizens should take a step back and consider the proposals on their merits, however.

I don’t agree with every suggestion in this book, but I find a number of them to be well considered.

On the big topic, the broad concept that both government and the private sector must work together in their proper roles in order to get our nation back on track, I think the book is right on.

On the subject of education, this book is especially valuable. In truth, as the authors affirm, bailouts and stimulus packages—as necessary as they may be in certain crisis situations—will not solve America’s problems.

Real solutions depend on wise policy from government and mostly from innovation and leadership in the private sector.

Indeed, the best government can do is remove the current regulatory pressure on small business and allow the entrepreneurial American spirit to get our economy growing again.

Another recent book addresses these same issues from a different perspective.

Doom-and-Gloomers

I have long been a fan of the work of Harry S. Dent because his predictions, like those of John Naisbitt and Alvin Toffler, have been strikingly accurate even though they have been more specific, and therefore more likely to fall short, than those from most other forecasters.

Dent argues in his latest book, The Great Crash Ahead, that “the great economic crisis of 2008 will likely return in 2012, or 2013 at the latest, and will be even worse.”

His analysis is alarming, but interesting. Note that Dent is not a doom-and-gloomer.

Remember, when multiple authors in the mid-1990s were predicting a major crash ahead, Dent published The Roaring 2000s, which forecast that the stock market would boom for the next decade.

He also said that the boom would increase until a shock and downturn in 2008.

For most of his career, Dent has taken on the doomsayers and offered a counter-intuitive forecast of economic boom ahead.

The fact that he said the cycles would turn in the other direction in 2008, and that now he says they’ll get even worse, should concern every American.

Dent wrote:

“Debt and stimulus is like any drug: it takes more to create less effect.”
“Deflation is the only possible scenario in the decade ahead.”
“The U.S. Dollar will appreciate and be the safe haven—not gold, silver, the Euro or the Swiss Franc.”
“Home prices will fall by 55% to 65% from the top before this crisis is over.”
“Stock [will] crash to between 3,300 and 5,600 on the Dow by the end of 2013, or 2014 at the latest.”
“Also, the crash will be worldwide, not just in the United States and Europe, as the dramatic China bubble comes to an end.”
“The trends for the coming decade are crystal clear: we are going to experience a deeper downturn and deflation in prices, not inflation. We call this the Winter season; it comes predictably once in a lifetime, currently every 80 years, which means that very few people will understand what is happening.”[viii]

Whether we face massive inflation ahead, as Ken Kurson has argued,[ix] or the deflation Dent predicts, the economic future promises to be challenging.

As Dent notes, from 1775 to the year 2000 Americans accumulated $20 trillion in private debt.

From the year 2000 to 2008 (latest numbers), we accumulated $22 trillion more—for a total of $42 trillion.[x]

No doubt this trajectory has increased since 2008.

Since the economic difficulties ahead follow patterns that we haven’t witnessed since the 1930s, most of the current common wisdom on economics is lacking or just plain wrong.

“Unlearning is the key to times of change and transition,” Dent wrote. “What worked in a boom does not work in a downturn.”[xi]

Here are some of the things which have changed:[xii]

“It is your father’s economy”!
Don’t buy a bunch of new stuff—get out of the spending habit.
Make do with what you have.
Expect lower wages and lower prices.
Realize that debt is going to get a lot more expensive than it used to be.
Realize that assets and savings will be worth more over time.
Start thinking in terms of multiple streams of income.
“In the new world, management is the problem, not the solution.”
Entrepreneurship is in: “the coming decades and century will be seen as the age of the individual and the entrepreneur.”
Keep your business “lean and mean.”

Dent’s charts, arguments and analyses are a great read.

Add to this view the following thoughts from Friedman and Mandelbaum’s book, and we have an important look at the probable future in the years just ahead:

“No one should ever have to say ‘I am moving from America to Singapore because it is more hospitable to innovation and entrepreneurship.’ Just the opposite should be true. ‘You will know you’re successful,’ said PV Kannau, the India outsourcing entrepreneur, ‘if new companies in China and Brazil say, ‘We want to move our headquarters to America because that is the best place in the world to do business.’’

That’s not happening right now, because our regulatory and tax scheme is far from the best in the world….

“Twenty years ago, even ten years ago, a report such as this one would never have been commissioned. The United States was the best country in the world for business of any kind, the one with the largest and most open market, the most transparent legal system with the strongest property rights, the biggest and most efficient financial system, the most modern infrastructure, and the most dynamic ongoing research and development in almost every field. It was a magnet for capital and talent. No company of any size, indeed no company that merely aspired to international growth, could afford not to operate there, and none needed a consultant to tell it that.

“Now, alas, things are different. Over the past decade especially, American has changed, and not for the better.”[xiii]

How many more voices need to say the same thing before Washington listens?

Until we free up the American economy, reduce the red-tape and taxes on small business, and become the most inviting economy on earth, our economic problems will continue.

Many believe they will get worse—much worse.

The real tragedy is that all this is avoidable.

Free enterprise works.

America knows how to incentivize and encourage business growth. It’s time to get serious about restoring our free-enterprise economy—and soon!

The United States has one of the highest business tax rates in the developed world, and one of the most burdensome regulatory schemes.

Of course we can’t compete in such circumstances.

The question every American should ask is simply, why?

Why would the country that stands most for freedom in all world history now turn its back on the principles of freedom that made it great?

Why would we put our trust in bureaucracy, regulation and government rather than the proven dynamism of American enterprise?

We Can Only Ask, “Why?”

Whatever the answer, unless we make changes quickly the economic forecast ahead is dismal.

Friedman said America is like a nation turned upside down.

At the bottom is an enterprising people passionately seeking to overcome economic challenges with innovation, ingenuity and tenacity, while at the top is a government consistently blocking the entrepreneurial efforts of its people.[xiv]

Again, we can only ask, “Why?”

When Paul Kennedy wrote The Rise and Fall of the Great Powers over two decades ago, many scoffed at his prediction that American hubris was leading to our eventual downfall—in the way so many great nations and empires of history have declined.

Even the leading voice of anti-decline, Joseph S. Nye, has suggested that many of Washington’s policies are making it difficult for the U.S. to remain the world’s economic leader.

Hopefully the solution won’t be as drastic as Friedman, Mandelbaum and Dent predict.

“Shock therapy,” they suggest, may now be the only effective way to change our country.

If this is true, we are in for rocky times ahead.

One thing is certain.

Friedman and Mandelbaum rightly argue that the best way out of this is not so much to study the fall of Rome, the Ottoman Empire, or other historical examples of what not to do, but to make a national focus of studying what worked best in our own American history.[xv]

We know the answers, because they are part of our national heritage.

It is time to put aside our modernist sense of superiority and admit that we want what past generations had economically and learn what worked for them.

It will work again, if we are willing to learn and make the needed changes, because the principles of freedom are timeless and powerful.

Decline is not inevitable, but only a wise people well-studied in the principles of historical success can avoid it.

We must become such a people.

[i] September 1-7, 2011

[ii] Meet the Press, September 4, 2011

[iii] Ibid.

[iv] Ibid.

[v] Ibid.

[vi] Ibid.

[vii] Ibid.

[viii] From Harry S. Dent, The Great Crash Ahead.

[ix] See Ken Kurson, “Let Them Eat iPads,” Esquire, May 2011.